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Wednesday, March 12, 2008

Collective Negotiation Agreement (CNA) Incentive

The following is a proposed Collective Negotiation Agreement (CNA) Incentive

Issues:

Funding source of the CNA Incentive – savings from the MOOE paid as one-time benefit after the end of the year as provided under Section 7.1 of the DBM Budget Circular No. 2006-1 or the free unencumbered savings of the agency which are no longer intended for any specific purpose pursuant to Section 3 of PSLMC Resolution No. 4, s. 2002?

“7.1 The CNA Incentive shall be sources out from savings from released Maintenance and Other Operating Expenses (MOOE) allotment for the year under review, still valid for obligation during the year of payment of the CNA, subject to the following conditions: xxx”

Section 3 of PSLMC Resolution No.4, s/ 2002 provides, as follows

“Section 3. Savings refer to such balances of the agency’s released allotment for the year, free from any obligation or encumbrance and which are no longer intended for specific purpose/s:

(a) After completion of the work/activity for which the appropriation is authorized;

(b) Arising from unpaid compensation and related costs pertaining to vacant positions, or

(c) Realized from the implementation of the provisions of the CNA which resulted in improved systems and efficiencies thus enabled the agency to meet and deliver the required or planned targets, programs and services approved in the annual budget at a lesser cost.”

“Furthermore, the grant of the CNA Incentive pursuant to CNAs entered into on or the effectivity of PSLMC Resolution No. 4, series of 2002, and PSLMC Resolution No. 2, series of 2003, and in strict compliance therewith, is confirmed.

x x x

“Section 4. Savings as Source – The CNA Incentive shall be sourced only from the savings generated during the life of the CNA.

x x x

“Section 6. Implementation – The Department of Budget and Management shall issue the policy and procedural guidelines to implement this Administrative Order.”

Whether the CNA Incentive can be paid quarterly or as early as the amount of savings is determined by the Employee-Management Consultative Committee mentioned in DBM Budget Circular No. 2006-1 instead of one-time only after the end of the year.

5.7 of the DBM Budget Circular No. 2006-1 provides:

“5.7 The CNA Incentive for the year shall be paid as a one-time benefit after the end of the year, provided that the planned programs/activities/projects have been implemented and completed in accordance with the performance targets for the year.”

Whether the CNA Incentive can be granted to management people based on the following representations of Deputy Administrator Pedro S. Hernando, Jr., National Food Authority (NFA):

PSLMC Resolution No. 2,s. 2003 provides:

“Section 1. In recognition of the joint efforts labor and management to attain more efficient and viable operations, a CNA Incentive may be provided in the CNA to the rank-and-file.

“Section 2. The CNA must include, among others, provisions on improvement of income and productivity, streamlining of systems and procedures, and cost cutting measures that shall be undertaken by both the management and the union so that the operations of the GOCC/GFI can be undertaken at a lesser cost.”